UK miner Argo reports 280% increase in revenue despite May’s Bitcoin halving

Publicly-listed mining firm Argo Blockchain has published bullish interim half year results for 2020, despite the recent Bitcoin (BTC) halving and a host of “challenging conditions.”

Argo Blockchain PLC is headquartered in London, with its shares listed on the main market of the London Stock Exchange. For the six months through to June 30, the company’s revenues hit £11.2 million ($14.48 million) — a 280% increase from H1 2019 (£2.93 million, or $3.79 million). 

According to the company, the surge in revenue reflects a “major ramp-up in production.” The total number of Bitcoin mined during the first six months of 2020 reached 1,669 BTC — up 545% from H1 2019 (306 BTC). 

Argo’s CEO Peter Wall told Cointelegraph that over the past year, the company has strategically “focused on investing in new mining gear, and running that gear as efficiently as possible.” 

Argo’s interim management report reveals the extent of the company’s “major infrastructure build-out,” which involved the installation and production set-up of roughly 11,000 new machines to mine Bitcoin in the first three months of the year. 

This expansion ostensibly helped to ensure solid results despite the “considerable uncertainty” and “highly volatile pricing environment” for cryptocurrencies in the run-up to the Bitcoin halving in May 2020.

As previously reported, “halving” refers to the periodic and pre-coded 50% reduction of mining rewards for each block on the Bitcoin blockchain. This May’s halving event was highly anticipated and closely watched by the crypto community for its impact on both the currency’s price and on miners. 

Summarizing the halving’s impact amid a tumultuous six months, Argo’s management noted that the halving “results in greater pressure on inefficient miners and can affect difficulty rates.” 

Wall told Cointelegraph that “we're keeping a close eye on the SHA-256 hashrate and mining difficulty, and expect them both to continue to rise through the second half of this year, as newer machines come online.”

“The mining landscape, particularly since the halving in May, is obviously becoming more consolidated,” Wall said. He noted:

“In the post-halving world, it's no surprise that smaller and less efficient miners are struggling to compete due to the reduction in rewards and the increasing competitiveness.”

Beyond Bitcoin, Argo also purchased and installed a further 750 Antminer Bitmain machines to mine Zcash (ZEC) using the Equihash algorithm. This has brought its total number of machines for Zcash mining, together with older models, to 1,750.

This year’s scale-up, together with what Argo alludes to as a series of “proprietary machine optimization tools” designed by its technology team, were both apparently major factors in navigating the difficult trading environment this spring. 

For H1 2020, Argo’s mining margin was 39%, a figure the company claims was impaired by both the impact of the halving and weak market prices. 

Argo’s report further notes that in H1 2020, “mining was somewhat further impacted by the well-known quality issues with the Bitmain T17 miners, which were installed during the period” and affected “machine uptime and overall efficiency.” Argo is reportedly in discussions with Bitmain and its host to address the fallout from this situation.

Lastly, according to Argo’s management, the global pandemic brought “new execution risks” for the company, though this factor has apparently “not affected our operations to date.”